Financial and Managerial Accounting: The Basis for Business Decisions, 12/e

Jan R. Williams, University of Tennessee
Susan F. Haka, Michigan State University
Mark S. Bettner, Bucknell University
Robert F. Meigs

Rewarding Business Performance

Multiple Choice Quiz

Please answer all questions


1	If return on sales is 40% and capital turnover is 20%, what is ROI?
		A)	60%.
		B)	8%.
		C)	Can not be determined from information given.
		D)	Some other amount.


2	Which of the following is not one of the three primary criticisms of using ROI?
		A)	Short horizon.
		B)	Under certain circumstances, it presents an incentive for managers to reject a good project that would increase the ROI for the firm as a whole.
		C)	It is difficult to measure invested capital with actual earnings associated with that capital.
		D)	It has no meaning for companies that do not need to borrow capital.


3	Residual income is:
		A)	Revenue minus variable costs.
		B)	Revenue minus fixed costs.
		C)	Operating earnings minus minimum acceptable return.
		D)	The minimum acceptable return.


4	Which of the following is not a the balanced scorecard lens?
		A)	Investing perspective.
		B)	Customer perspective.
		C)	Financial perspective.
		D)	Learning and growth perspective.


5	Which of the following is not a measure of the financial perspective?
		A)	ROI.
		B)	Market share.
		C)	EVA.
		D)	Bond ratings.


6	If ROI is 9% and capital turnover is 30%,what is return on sales?
		A)	27%.
		B)	30%.
		C)	3%.
		D)	Some other percent.

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